Primary sector industries are defined as agriculture, forestry and fishing. Secondary industries include energy, mining and quarrying, manufacturing and construction. Tertiary sector industries are made up of wholesale, retail and repair, hotels and restaurants, transport, financial services and education and health.

Figure 17 shows employment in enterprises in Scotland registered for VAT and/or PAYE. In all areas in Scotland the tertiary sector is the most significant in terms of employment. Primary sector industries employ a greater proportion of people in remote rural (17%) and accessible rural (12%) areas, than in the rest of Scotland (0.4%).

The public sector accounts for around a fifth of employment in rural areas and around a quarter of employment in the rest of Scotland.

Figure 18 shows the distribution of employment across sectors within each of the geographical areas, with workers in the public sector shown as a single category.

In remote rural areas 'Agriculture, forestry and fishing' is the largest source of private sector jobs (17%) followed by 'Hotels and restaurants' (13%).

In accessible rural areas, 'Agriculture, forestry and fishing', 'Manufacturing' and 'Financial intermediation, real estate, renting and business activities' are the most significant sectors.

'Agriculture, forestry and fishing' is the sector that shows the greatest difference across Scotland, accounting for 17% of workers in remote rural areas compared to 12% in accessible rural areas and less than 1% in the rest of Scotland. Financial intermediation accounts for 19% of jobs in the rest of Scotland but only 12% in accessible rural areas and 8% in remote rural areas.

Business

Figure 19 shows that micro (0-9 employees) and other small businesses (10-49 employees) account for over half of those employed in remote rural areas and 42% in accessible rural areas. Micro businesses are particularly prevalent in remote rural areas.

Large businesses (250+ employees) account for 41% of those employed in the rest of Scotland but only 27% in accessible rural areas and 16% in remote rural areas.

Table 22: Population (16 to 74) in Employment by Socio-Economic Classification

Remote Rural

Accessible Rural

Rest of Scotland

Higher managerial and professional occupations

8%

11%

11%

Lower managerial and professional occupations

22%

26%

27%

Intermediate occupations

9%

12%

15%

Small employers or own account workers

21%

14%

7%

Lower supervisory and technical occupations

11%

10%

11%

Semi-routine occupations

16%

15%

17%

Routine occupations

13%

11%

13%

Total

100%

100%

100%

Source: General Register for Scotland, 2001 Census

A similar proportion of people in managerial and professional occupations live in accessible rural areas and in the rest of Scotland. Eight per cent of employees in remote rural areas work in such occupations.

A greater proportion of workers in remote rural areas (21%) are small employers or own account workers than in accessible rural areas (14%) or the rest of Scotland (7%).

Table 23 shows the number of business openings and closures as measured by the number registering for either VAT or PAYE. It therefore excludes businesses with no employees and a turnover below the VAT threshold (£67,000 as at 1st April 2008).

The business opening rate in rural areas is slightly lower than in the rest of Scotland, more so in remote rural areas. Likewise, the closure rate is lowest in remote rural areas (7%), higher in accessible rural areas (8%) and slightly higher again in the rest of Scotland (9%).

In 2007, the Scottish Government introduced a National Indicator to increase the business start up rate, against a 2006 baseline.

Economic Activity

Figure 20 shows that a higher proportion of people in rural areas are economically active (i.e. employed or looking for work) than in the rest of Scotland. The employment rate (the number of people employed as a percentage of the total population of working age) is also higher in rural Scotland than in the rest of Scotland.

A higher percentage of the working age population is either employed, in education or training in rural areas than in the rest of Scotland.

Unemployment rates (that is the number of people unemployed as a percentage of all those who are economically active, of all ages) are slightly lower in rural Scotland than in the rest of Scotland.

Figure 21 shows that the employment rates are higher for all sub-groups in rural areas compared to the rest of Scotland. The difference in employment rates between rural areas and the rest of Scotland are more marked for males aged 16-64, with a difference of 10% between the two employment rates.

Table 24: Patterns of Work by Geographic Area, 2009

Remote Rural

Accessible Rural

Rest of Scotland

Percentage of employed males who are:

Self-employed

23%

21%

12%

Working part-time in main job

12%

10%

11%

With a second job

7%

4%

3%

Homeworkers*

26%

21%

9%

Percentage of Employed Females who are:

Self-employed

13%

11%

6%

Working part-time in main job

51%

43%

41%

With a second job

9%

7%

5%

Homeworkers*

28%

23%

8%

Percentage of All employed who are:

Self-employed

18%

17%

9%

Working part-time in main job

30%

25%

26%

With a second job

8%

5%

4%

Homeworkers*

21%

17%

8%

Source: Annual Population Survey in Scotland, 2009 (Using Scottish Government Urban Rural Classification 2007-2008) Note: Includes workers of all ages, not just working age * Homeworkers are people who work mainly in their own home, or in different places using home as a base, in their main job. Excludes people on government employment and training schemes

Table 24 shows that self-employment is almost twice as common in rural Scotland as in the rest of Scotland. In all areas men are more likely than women to be self employed. Of employed males in remote rural areas, 23% are self-employed.

Women are more likely than men to work part-time. Whilst percentages of men working part-time are similar across Scotland, there are variations for women with just over half of female workers in remote rural areas working part-time in their main job.

The percentage of employed people in remote rural areas who have a second job (8%) is higher than in accessible rural areas or in the rest of Scotland (5% and 4% respectively).

A greater percentage of those employed in rural areas (particularly remote rural) are "homeworkers" i.e. they work mainly in their own home or use home as a base.

Earnings

Figure 22 shows the median hourly wage rate for all male and female employees in each of the geographical areas. The median rate is highest for employed male residents of accessible rural areas, and lowest for employed females in the rest of Scotland. For female employees solely, the rate is slightly higher in remote rural areas than in the rest of Scotland.

Source: Annual Survey of Hours and Earnings, 2009 (Using Scottish Government Urban Rural Classification 2007-2008) Notes: 1. Employees on adult rates who have been in the same job for over a year. 2. Resident Earnings.

Table 25 shows that the median gross annual pay (i.e. before taxation and other deductions) for full-time employees is highest in accessible rural areas and lowest in remote rural areas. The pattern observed in Figure 22 also applies here, i.e. annual pay is highest for male employees in accessible rural areas and lowest for female employees in the rest of Scotland.

Income

Figure 23: Annual Net Income of Highest Income Householder by Geographic Area, 2009

Source: Scottish Household Survey, 2009 (Using Scottish Government Urban Rural Classification 2007-2008) Note: Scottish Household Survey results have recently been published based on the 2009-2010 Urban Rural Classification and as such some results may differ. Please see the Sources section for more information.

Figure 23 presents net household income figures (for the highest income householder) by geographic area. The income figures include income from employment, benefits and other sources (after taxation and other deductions).

Relative to the rest of Scotland, there is a higher percentage of households in rural areas with a net annual household income of over £20,000, especially in accessible rural areas.

Income deprivation is comprised of six indicators including being in receipt of Income Support, Job Seeker's Allowance and Working and Child Tax Credits.

Employment deprivation is comprised of four indicators that identify those people that want to work, but due to unemployment, ill health or disability are excluded from the labour market. The indicators used are Unemployment Claimant Count, Incapacity Benefits, Disablement Allowance and Compulsory New Deal Participants.

Table 26 shows that the percentage of the total population that is income deprived is lower in rural areas than the rest of Scotland, and is lowest overall in accessible rural areas.

The percentage of the working age population that are employment deprived is also lower in rural areas than in the rest of Scotland.

Access to Finance for Small and Medium-sized Enterprises ( SMEs)

Figure 24: Percentage of SMEs that Applied for Finance During Previous Two Years by Geographic Area, 2009

Source: SME Access to Finance 2009

Figure 24 shows that the percentage of SMEs who applied for finance is similar across remote rural areas (56%) and the rest of Scotland (55%), and slightly lower for businesses located in accessible rural areas (52%).

Figure 25: Forms of Finance Applied For by SMEs During Previous Two Years by Geographic Area, 2009

Source: SME Access to Finance 2009

Figure 25 shows that, between 2007 and 2009, overdrafts were the most common form of finance applied for irrespective of geographic location. However, SMEs in accessible rural locations were more likely to apply for overdrafts than elsewhere and less likely to enter leasing or hire purchase agreements to finance their businesses. SMEs in rural areas were less likely than SMEs based in the rest of Scotland to apply for credit cards.

Figure 26: Percentage of SME Applications for Finance Rejected During Previous Two Years by Geographic Area, 2009

Source: SME Access to Finance 2009

Figure 26 shows that SMEs in rural areas were less likely to make applications for finance that were rejected. Remote rural firms were the least likely to have applications rejected with just 7% compared to 14% for firms in accessible rural areas and 26% in the rest of Scotland.

Respondents to the SME Access to Finance Survey 2009 were asked to rate how much they perceived certain factors as being barriers to success on a scale of 0 to 5, with 5 being the highest.

For most of the variables identified, SMEs in accessible rural areas view more factors as stronger barriers to success than firms in other areas. The exception to this being access to finance which firms in remote rural locations and the rest of Scotland view as being greater obstacles. Across all SMEs getting orders and tax and regulations were highlighted as two of the biggest barriers to success for their firm.

Figure 28: Growth Amtitions of SMEs Over Next Three Years by Geographic Area, 2009

Source: SME Access to Finance 2009

Figure 28 shows that a higher percentage of SMEs in rural areas seek to keep their business the same size over the next five years, than in the rest of Scotland. Fifty-six per cent of firms in both remote rural and accessible rural areas said their ambition was to stay the same size or reduce the size of the business compared to 42% of firms in the rest of Scotland. The rest of Scotland also has the largest proportion of firms whose ambition is to grow substantially.

Figure 29: SMEs by Age of Business and Geographic Area, 2009

Source: SME Access to Finance 2009

Figure 29 shows that the majority of remote rural SMEs are over 15 years old and 85% of them are over 4 years old. Eighty per cent of firms in accessible rural areas are over 4 years old. This contrasts with the rest of Scotland where 31% of SMEs are over 15 years old and 74% of firms are over 4 years old. A smaller proportion of rural Scottish SMEs are new or very young businesses than in the rest of Scotland.